![]() ![]() Once a morning star pattern is spotted, investors may follow it closely and take advantage of a positive trend reversal situation. Morning Star Pattern Screenerĭuring technical analysis, analysts view the morning star pattern in the form of a bullish trading signal after a downward trend. The pattern provides a strong confirmation signal for traders who may not wait to see the status of the fourth candle before investing in the stock. The third candlestick acts as a confirmation for the pattern formation as it is expected to close into the body of the first one. The star is a representation of weakness identifying that sellers were not able to achieve a price lower than the close during the previous period. The star candle in this pattern may not be below the low point of the darker candlestick and may exist within its lower shadow as well. The middle candle is a star candle with a short body.ĭifferences also exist in gaps between the three candlesticks. While the first candle is dark with a large body, the third candle has a lighter body. It is a warning signal which appears when there is a weakness in a downtrend. A morning star candlestick pattern can successfully predict or explain trends in price movements in the case of securities/ equity, currency trading, or financial derivatives. Morning star pattern is another form of a bullish bottom reversal pattern. ![]()
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